Income Tax liability on net of Notice period deduction, Income Tax

[Pradeep Jain]

Sir,

We have deducted Notice period  amount from the employee who had not given the notice before leaving the company.

Now we wish to know that Income tax would be deducted on his taxable salary or after deducting the notice period amount from his salary.

Early action is highly appreciated.

Best  Regards

Pradeep Jain

Posts / Replies

[CS Swati Dodhi]

Supreme Court in the case of Commissioner Of Income-Tax, West Bengal II Versus Kalyanji Mavji And Co. [1980 (1) TMI 87 - SUPREME COURT]  held that notice pay is taxable in the year of receipt.

 Yes tax will be deducted after deducting notice pay.